Cumulative loss situation that will arise from last week’s #EndSARS protest hijacked by hoodlums across the country is the highest in history of insurance business in Nigeria, operators have said.
This follows the wanton damages in lives and properties of both government and private businesses.
According to the operators, the expected claims may be so huge and capable of swallowing the industry if government fails to support in helping to meet claims obligations, expected to be in billions of naira at a time the sector is embarking on a recapitalisation exercise.
Aside the number of people that lost their lives or got injured who may claim from health insurance, public and government assets razed by fire, shopping malls looted and vandalised, private businesses looted and vandalised, as well as private residents and businesses of politicians that were also affected, have claims to make from insurance.
The #EndSARS loss incident is covered in insurance under policies that extend to riot and civil commotion. So, fire and burglary or Commercial property insurance if extended covers damage that results from vandalism, rioting and civil commotion. These policies specifically include coverage for acts of looting in connection with a riot or civil commotion.
Ademayowa Adeduro, managing director/CEO, Law Union & Rock Insurance plc, says the loss is colossal and I am not sure whether we have witnessed this before, apart from the Civil War era. “The destructions are massive and because there was curfew, the perpetrators had a field day going around looting, setting houses, banks, shops on fire. Insurance industry is going to pay heavily for it,” Adeduro states.
He notes, “I don’t know as an industry why we should not request for government support for this. Government should have prevented the situation so that it would not have gotten out of hand as it happened. Government should have envisaged this kind of thing and do every within her power to prevent it.
“The destructions started after curfew was declared. I think there should have been a back-up measure to prevent the massive destructions and lootings by some bad element who hijacked the hitherto good intentions of our youths.”
According to Adeduro, insurance companies are going to pay because some of those clients whose properties are affected should not be left to lick their wounds without adequate compensation in one way or the other, depending on the outcome of Loss Adjusters’ investigation as per the terms and conditions that guide insurance policies.
“For instance, some policies may have Riot, Civil Commotion, and Strife as terms and condition. So, if you don’t have these as terms and conditions in your policies, you will not be compensated. If the situation is not properly handled, it’s going to weaken the insurance industry. But by and large, I think the industry is going to sit together as a body and demand for government support,” he says.
The support can come in form of tax holiday; it can come in form of long-term loan for the operators to be able to pay the claims and write it off or pay it back in future, because the situation is capable of sinking or throwing some companies off balance, especially now the companies are going through recapitalisation, he notes.
“From report, we are made to know that a lot of private properties along Surulere, Ikeja, Lekki and other places and in other parts of the country have been affected, apart from public buildings. In Lagos, I know Lagos State have insurance for those vehicles, over 100 that were burnt and they need to be compensated.
“My recommendation is that insurance industry should write to the government for incentive to be able to meet this colossal loss of lives and properties. When something like this happens, the government should be able to rise to the occasion and support the sector to be able to meet her obligations, he notes further.
Fatai Adegbenro, executive secretary, Nigerian Council of Registered Insurance Brokers (NCRIB), describes the incidence as a good omen for the industry to prove to the insuring public that insurance works.
Adegbenro implores the underwriters and the brokers to put a call to and reach out to their clients who are affected, and when the situation settles, quickly send Loss Adjusters to go and assess the state of damage and ensure that compensation are paid to them within two weeks.
Nobody appreciate insurance until something like this happens, he says, adding that when something like this happens and claims are made as quickly as possible to affected insured, it builds people confidence in the industry, imploring insurers to rise up to their obligations.
“I think insurance industry will rise to prove that insurance works in Nigeria and that there is no cause for alarm,” Adegbenro states.
According to Segun Bankole, general manager, marketing and corporate communications, Sovereign Trust Insurance, the incidence is unfortunate, especially for the number of lives lost.
What will determine whether the victims of the protests, especially those whose properties were destroyed will be indemnify by insurance companies or not is whether their affected properties have genuine and adequate insurance cover or not, and whether their policies cover Riot, Civil Commotion and Strife, as not every insured always like to take these when they are taking Fire Insurance, Bankole notes.
This incidence will open the eyes of a lot of people because when you ask people to take insurance cover for their businesses; they will tell you ‘God is my insurer.’ Few days after the incidence, one of my colleagues in the office, said on the platform that he had received about 10 calls from people who are now asking that they want to insure their properties or homes. Before, when you tell them to do insurance, they decline and now they have seen the importance and the necessity to take insurance for their business and properties, he states.
“Insurance industry should be ready for claims after everything is settled. For example, Nigerian Ports Authority (NPA) is a government establishment affected by the incidence and expectedly must have taken insurance so they have to be compensated when they file for claims, he says.
It is unfortunate that this is coming in a very bad time; the time when the industry is undergoing recapitalisation, and with the situation on ground, they are going to be paying out a lot of claims and how do you now get funds to recapitalise, he asks.
For Ben Ujoatuonu, managing director/CEO, Universal Insurance plc, insurance companies will pay for every cover that extends to riot and commotion, but will not pay for covers that exclude riots and commotion.
“it depends on the cover the company or individual has bought. If the policy excludes riot and civil commotion, then the insured will not receive any indemnity from his insurance company,” he says.
He however notes that some policies may have been extended to cover riot and civil commotion, in such situation liability will attach.
He further states that most of the companies that arranged their insurance through brokers, there is every likelihood that they would have bought such extension.